‘Their eyes are on D.C.’: Capital area said to have good shot at Amazon HQ2

Urban experts and Irish oddsmakers agree that the Washington region's chances of landing Amazon.com's second headquarters jumped significantly last week when the area won three spots on the company's list of 20 potential locations.

Greater Washington boasts almost all the attributes that the online retail giant says it wants for a $5 billion investment that will create up to 50,000 well­paying jobs. The region has one of the nation's best-educated workforces, a diverse population, international airports and public transit. It can't hurt that Amazon founder Jeffrey P. Bezos bought a $23 million mansion in the District a year ago and owns the local newspaper (this one).

"I think their eyes are on D.C.," said Richard Florida, a professor at the University of Toronto and author of influential books on urban issues. "For Amazon, it solves a lot of problems."

But the three local contenders on Amazon's short­list — the District, Montgomery County and Northern Virginia — still face strong competition from large, cosmopolitan metro areas including New York, Boston and Atlanta.

In addition, a historical lack of cooperation among the District, Maryland and Virginia threatens the region's bid, according to local officials and academic analysts.

Seattle-based Amazon has said it wants a strong, stable working relationship with local authorities. That poses a challenge for a region where power is split among two states and a federal district. The area's well-known failure in recent months to agree on how to fund Metro has highlighted the problem.

"Washington has a really good chance if they are cohesive," said Amy Liu, director of the Metropolitan Policy Program at the Brookings Institution. "Unfortunately, that's not where the region is."

Greater Washington was the only metropolitan area in the North America-wide competition with three locations to make the cut.

That helped lead Dublin-based Paddy Power bookmakers to say the odds for Montgomery County jumped dramatically, from a long shot at 250-1 to one of the favorites at 8-1. The District was close behind at 10-1, while Northern Virginia placed at 20-1.

The oddsmaker saw Boston as the most likely winner, with odds at 3-1, followed closely by Austin and Atlanta.

Each of the three locations in the Washington area suggested more than one site for the Amazon campus, which the company said would require up to 8 million square feet of office space.

Montgomery County and Northern Virginia have not publicly divulged the sites, for fear of hurting their competitive position. But local officials, speaking on the condition of anonymity, identified some of the locations. Montgomery, they said, has proposed two Maryland sites: White Flint and another nearby in North Bethesda. Both enjoy support from the state and county.

Sites proposed in Northern Virginia, the officials said, which also are said to enjoy state support, include:

• A plot near Dulles International Airport occupied by the Center for Innovative Technology and supported jointly by Fairfax and Loudoun counties.

• A site in the Crystal City/ ­Potomac Yard area, backed by Arlington and Alexandria.

• Two sites in Prince William County — Potomac Shores in the eastern part of the county and Innovation Park in the western part.

The District has publicly identified four sites: Anacostia Riverfront, NoMa-Union Station, Hill East and Shaw-Howard University.

Some observers said the Washington region should have agreed jointly on a single site and offered it. A unified pitch would be stronger, and everybody in the area benefits no matter who gets the prize.

"D.C. might stand to be a big beneficiary, even if Arlington gets the ultimate nod," said Harriet Tregoning, a former planning and development official at the U.S. Department of Housing and Urban Development.

The Metropolitan Washington Council of Governments studied the possibility of a joint regional proposal in September, but the area jurisdictions quickly decided to go their own ways.

One obstacle: The District, Virginia and Maryland would have found it difficult, if not impossible, to offer subsidies for a project to be built outside their jurisdictions.

Amazon's inclusion of three locations in the Washington area fueled speculation that the company has the region at the top of its list and wants to pit the three sites against each other in offering financial breaks.

"This is a textbook example of how to wrangle incentives," Florida said.

There were signs that the region's governments were prepared to succumb to the temptation. Maryland Gov. Larry Hogan (R) disclosed Thursday that Maryland's inducements to lure Amazon totaled more than $5 billion. The offer, which Hogan was to describe in detail on Monday, includes tax incentives and transportation improvements.

That would be by far the biggest economic development package ever offered in Maryland. By contrast, the state and county extended loans, tax credits and grants totaling $62 million to Marriott International last year to build a new headquarters in Bethesda.

Montgomery County Executive Isiah Leggett (D) acknowledged the incentives offered to Amazon were large but suggested they were worth the price given what 50,000 new jobs would mean.

"I believe they are affordable. I believe they are in the public's interest," said Leggett, who declined to divulge the package's contents.

Even at $5 billion, Maryland's package was smaller than the one offered by New Jersey. It said its inducements, in hope of attracting the company to Newark, were worth $7 billion.

Virginia and the District both declined to say whether they would match Maryland's offer.

Suzanne W. Clark, communications director for the Virginia Economic Development Partnership, said it could not provide details "for competitive reasons and to protect confidential company information."

Brian Kenner, D.C. deputy mayor for planning and economic development, said winning the Amazon contest would "accelerate the growth of . . . vibrant [D.C.] neighborhoods, and we will offer incentives appropriate to that impact."

Although Amazon is trying to extract the biggest grants and tax breaks it can, local officials and private analysts said the single biggest factor for the company is a region's ability to attract and retain a high-quality workforce over decades.

That augurs well for greater Washington, partly because its population includes a high percentage of people with college and postgraduate degrees. The area also includes numerous vibrant, walkable neighborhoods — such as Penn Quarter, Bethesda and Clarendon — that are desirable to millennial professionals whom Amazon wants to hire.

Victor Hoskins, director of economic development for Arlington, said his county's pitch to Amazon noted that 36 percent of the working population has advanced degrees.

Hoskins also addressed concerns that a huge influx of residents would swamp the winning location. He said the key to absorbing the surge was to add infrastructure in phases over eight to 10 years.

"You build the commercial building first . . . [and then] you build the housing related to that," Hoskins said. "We have a history of developing very well-planned communities. We would use that knowledge base to make sure this didn't overwhelm our community."

Many officials and analysts thought the Washington region could best demonstrate to Amazon its readiness to cooperate by uniting around a funding plan for Metro.

"There's no question Amazon needs a well-functioning transit system, making the imperative for all three jurisdictions to act together on Metro to provide dedicated funding and real governance reform even more urgent," said Jason Miller, chief executive of the Greater Washington Partnership.

"More broadly, a demonstration of regional unity can make clear to Amazon that regardless of which of the three locations that it chooses, they will be getting the best the capital region has to offer."

Liu, of Brookings, added: "D.C., Maryland, and Virginia came together for the Olympic bid. They can do that again for the Amazon bid."